Copper climbs on report showing resilient Chinese economy

LONDON: Copper edged up on Monday on expectations of higher demand from top consumer China after a report showed a resilient economy despite a modest monthly decline in manufacturing activity.

Benchmark copper rose 0.5 percent to $6,829 per tonne by 1050 GMT, edging away from a two-week low touched on Friday. The metal shed 2.4 percent on Friday in its worst performance since early February.

Growth in China’s vast manufacturing sector eased only slightly in April in a sign of broad economic resilience, though slowing export orders pointed to risks to the outlook amid a simmering Sino-US trade row.

It marked the 21st straight month of expanding business conditions in China.
“The Chinese data is probably main catalyst for the rise (in copper),” said ETF Securities analyst Nitesh Shah.

“But there is also a dose of volatility in metals, with the uncertainty surrounding steel and aluminium about whether there will be exemptions for European countries.”

The United States imposed import tariffs of 25 percent on steel and 10 percent on aluminium in March, but it provided a temporary exemption until May 1 for the EU. President Donald Trump will decide then whether to make the exemption permanent.

COPPER: Chile’s Escondida, the world’s largest copper mine, said on Thursday early contract talks with its workers’ union ended without an agreement, setting the stage for legally scheduled negotiations to begin in June.

ALUMINIUM STOCKS: Total stocks of aluminium in LME-approved warehouses fell 8,575 tonnes to 1.3 million tonnes. About 69 percent of that is available to the market.

ALUMINIUM POLL: Aluminium market deficits are set to deepen, but the market is likely to rebalance once the dust settles after US sanctions on Russian producer Rusal, leaving prices little changed, a Reuters poll showed.

PRICES: Aluminium was flat at $2,221.50 per tonne, after clocking its worst week since November 2008, down 10 percent.

The price of metal used in aeroplane parts and beer kegs has been erratic since the United States imposed sanctions on a major shareholder of the world’s second-biggest aluminium producer, Russia’s Rusal.

RUSAL: Rusal will overhaul its board and management in the hope of persuading the United States to lift sanctions, but it may be forced to suspend aluminium exports for good if the plan fails, sources close to the company said.